Regulation (EU) No 514/2014 of the European Parliament and of the CouncilShow full title

SECTION 2 U.K. Management and Control

Article 21 U.K. General principles of management and control systems

For the implementation of its national programme, each Member State shall set up management and control systems, which shall provide for:

(a)

a description of the functions of each authority involved in management and control, and the allocation of functions within each authority;

(b)

compliance with the principle of separation of functions between and within such authorities;

(c)

procedures for ensuring the correctness and regularity of expenditure declared;

(d)

computerised systems for accounting, for the storage and transmission of financial data and data on indicators, for monitoring and for reporting;

(e)

systems for reporting and monitoring where the Responsible Authority entrusts the execution of tasks to another body;

(f)

arrangements for auditing the functioning of the management and control systems;

(g)

systems and procedures to ensure an adequate audit trail;

(h)

the prevention, detection and correction of irregularities, including fraud, and the recovery of amounts unduly paid, together with any interest on late payments.

Article 22 U.K. Responsibilities under shared management

In accordance with the principle of shared management, Member States and the Commission shall be responsible for the management and control of national programmes in accordance with their respective responsibilities laid down in this Regulation and the Specific Regulations.

Article 23 U.K. Responsibilities of beneficiaries

Beneficiaries shall fully cooperate with the Commission and competent authorities when they carry out their functions and tasks in relation to this Regulation and the Specific Regulations.

Article 24 U.K. Responsibilities of Member States

1. Member States shall fulfil the management, control and audit obligations and assume the resulting responsibilities, which are laid down in the rules on shared management set out in Regulation (EU, Euratom) No 966/2012 and this Regulation.

2. Member States shall ensure that their management and control systems for national programmes are set up in accordance with this Regulation and that those systems function effectively.

3. Member States shall allocate adequate resources for each competent authority to carry out their functions throughout the programming period.

4. Member States shall set up transparent rules and procedures for the selection and implementation of projects in accordance with this Regulation and the Specific Regulations.

5. All official exchanges of information between the Member State and the Commission shall be carried out using an electronic data exchange system. The Commission shall establish, by way of implementing acts, the terms and conditions with which that electronic data exchange system is to comply. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 59(3).

Article 25 U.K. Competent authorities

1. For the purposes of this Regulation and the Specific Regulations, the competent authorities are:

(a) a Responsible Authority: a public sector body of the Member State concerned, which is the designated body within the meaning of Article 59(3) of Regulation (EU, Euratom) No 966/2012 and which shall be solely responsible for the proper management and control of the national programme and shall handle all communication with the Commission;

(b) an Audit Authority: a national public authority or body, which is functionally independent of the Responsible Authority and which shall be responsible for issuing annually the opinion referred to in the second subparagraph of Article 59(5) of Regulation (EU, Euratom) No 966/2012;

(c) where appropriate, one or more Delegated Authorities: any public or private body which carries out certain tasks of the responsible authority under the responsibility of the Responsible Authority.

2. Each Member State shall lay down rules governing the relations between the authorities referred to in paragraph 1 and their relations with the Commission.

Article 26 U.K. Designation of Responsible Authorities

1. Member States shall notify the Commission of the formal designation, in accordance with Article 59(3) of Regulation (EU, Euratom) No 966/2012, at ministerial level of the Responsible Authorities in Member States responsible for the management and control of expenditure under this Regulation, as soon as possible after the approval of the national programme.

2. The designation referred to in paragraph 1 shall be made subject to the body complying with the designation criteria on internal environment, control activities, information and communication, and monitoring laid down in or on the basis of this Regulation.

3. The designation of a Responsible Authority shall be based on an opinion of an audit body, which may be the Audit Authority, that assesses the Responsible Authority’s compliance with the designation criteria. That body may be the autonomous public institution responsible for monitoring, evaluating and auditing the administration. The audit body shall function independently of the Responsible Authority and shall carry out its work in accordance with internationally accepted audit standards. In accordance with Article 59(3) of Regulation (EU, Euratom) No 966/2012, Member States may base their decision on designation on whether the management and control systems are essentially the same as those in place for the previous period and whether they have functioned effectively. If the existing audit and control results show that the designated bodies no longer comply with the designation criteria, Member States shall take the necessary measures to ensure that deficiencies in the implementation of the tasks of those bodies are remedied, including by ending the designation.

4. To ensure the sound operation of this system, the Commission shall be empowered to adopt delegated acts in accordance with Article 58 concerning:

(a) minimum conditions for the designation of the Responsible Authorities with regard to the internal environment, control activities, information and communication, and monitoring, as well as rules on the procedure for making and ending the designation;

(b) rules relating to supervision and the procedure for reviewing the designation of Responsible Authorities;

(c) the obligations of the Responsible Authorities as regards public intervention, as well as on the content of their management and control responsibilities.

Article 27 U.K. General principles on controls by Responsible Authorities

1. Responsible Authorities shall carry out a systematic administrative control and shall supplement such a control by on-the-spot controls, including, where appropriate, unannounced on-the-spot controls of the expenditure related to the final payment requests from the beneficiaries that are declared in the annual accounts with a view to obtaining a sufficient level of assurance.

2. As regards on-the-spot controls, the Responsible Authority shall draw its control sample from the entire population of beneficiaries comprising, where appropriate, a random part and a risk-based part, in order to obtain a representative error rate and a minimum confidence level, while targeting also the highest errors.

3. The Responsible Authority shall draw up a control report on each on-the-spot control.

4. Where problems detected appear to be systemic in nature and may therefore entail a risk to other projects, the Responsible Authority shall ensure that a further examination is carried out, including additional controls where necessary, to establish the scale of such problems and whether the error rate is above the acceptable level. The necessary preventive and corrective measures shall be taken by the Responsible Authority and shall be communicated to the Commission in the summary referred to in point (b) of the first subparagraph of Article 59(5) of Regulation (EU, Euratom) No 966/2012.

5. The Commission shall adopt, by way of implementing acts, the necessary rules aiming at achieving a uniform application of this Article. Those rules may in particular relate to the following:

(a) the rules concerning administrative and on-the-spot controls including unannounced on-the-spot controls, to be conducted by the Responsible Authority with regard to compliance with obligations, commitments and eligibility rules resulting from the application of this Regulation and the Specific Regulations, including the rules relating to the period of time for which supporting documents should be kept;

(b) the rules on the minimum level of on-the-spot controls necessary for an effective management of the risks, as well as the conditions under which Member States have to increase such controls, or may reduce them where the management and control systems function properly and the error rates are at an acceptable level;

(c) the rules and methods on the reporting of the controls and verification carried out and their results.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 59(3).

Article 28 U.K. Payment to beneficiaries

Responsible Authorities shall ensure that the beneficiaries receive the total amount of the public support as quickly as possible and in full. No amount shall be deducted or withheld and no specific charge or other charge with equivalent effect shall be levied that would reduce those amounts for the beneficiaries.

Article 29 U.K. Functions of the audit authority

1. To support the opinion given in accordance with Article 59 of Regulation (EU, Euratom) No 966/2012, the audit authority shall ensure that audits are carried out on the management and control systems, and on an appropriate sample of the expenditure included in the annual accounts. The Commission shall be empowered to adopt delegated acts in accordance with Article 58 of this Regulation on the status of the Audit Authorities and the conditions which their audits shall fulfil.

2. Where audits are carried out by a body other than the Audit Authority, the Audit Authority shall ensure that any such body has the necessary specialist expertise and functional independence.

3. The Audit Authority shall ensure that audit work meets internationally accepted auditing standards.

Article 30 U.K. Cooperation with audit authorities

1. The Commission shall cooperate with audit authorities to coordinate their respective audit plans and methods and shall as soon as possible exchange the results of audits carried out on management and control systems in order to make the best possible and proportionate use of control resources, and to avoid unjustified duplication of work.

2. The Commission and the audit authorities shall meet on a regular basis to exchange views on issues relating to the improvement of the management and control systems.

Article 31 U.K. Controls and audits by the Commission

1. The Commission shall rely on available information, including the designation procedure, the request for payment of the annual balance as referred to in Article 44, annual implementation reports and audits carried out by national and Union bodies, to assess whether the Member States have set up management and control systems that comply with this Regulation, and whether those systems function effectively during the implementation of national programmes.

2. Without prejudice to audits carried out by Member States, Commission officials or authorised Commission representatives may carry out on-the-spot audits or controls subject to giving at least 12 working days notice to the competent national authority, except in urgent cases. The Commission shall respect the principle of proportionality by taking into account the need to avoid unjustified duplication of audits or controls carried out by Member States, the level of risk to the Union budget and the need to minimise the administrative burden on beneficiaries. Officials or authorised representatives of the Member State may take part in such audits or controls.

3. The scope of the audits or controls may include, in particular:

(a) the verification of the effective functioning of management and control systems in a national programme or a part thereof;

(b) the compliance of administrative practices with Union rules;

(c) the existence of the required supporting documents and their correlation with the actions supported under the national programmes;

(d) the terms on which the actions have been undertaken and controlled;

(e) an assessment of the sound financial management of actions and/or the national programme.

4. Commission officials or authorised Commission representatives, duly empowered to carry out on-the-spot audits or controls, shall have access to all necessary records, documents and metadata, irrespective of the medium in which they are stored, relating to projects and technical assistance or to management and control systems. Member States shall provide copies of such records, documents and metadata to the Commission upon request. The powers set out in this paragraph shall not affect the application of national provisions which reserve certain acts for agents specifically designated by national legislation. Commission officials and authorised representatives shall not take part, inter alia, in home visits or the formal questioning of persons within the framework of national legislation. However, they shall have access to the information thus obtained without prejudice to the competences of national courts and in full respect for the fundamental rights of the legal subjects concerned.

5. At the request of the Commission and with the agreement of the Member State concerned, additional controls or inquiries into the actions covered by this Regulation shall be undertaken by the competent bodies of that Member State. Commission agents or persons delegated by the Commission may take part in such controls. In order to improve controls, the Commission may, with the agreement of the Member States concerned, request the assistance of the authorities of those Member States for certain controls or inquiries.

6. The Commission may require a Member State to take the actions necessary to ensure the effective functioning of its management and control systems or the correctness of expenditure in accordance with the applicable rules.